Protecting your home from care home fees

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As you grow older, one of the things you might be most concerned about is the entire value of your home disappearing on paying care home fees.

Over recent years, fees for care homes have risen rapidly. Research has found that Britons pay Ā£10.9 bn of their own money into privately funded care a year. According to market intelligence provider, Laing Buisson, the average bill was Ā£844 a week in 2018, compared with Ā£445 a week in 1998.If you have complex health and care needs, you may be eligible for NHS continuing healthcare. This is free and is funded by your local clinical commissioning group (CCG).

If you donā€™t qualify for continuing healthcare, but have been assessed as needing care in a nursing home, you may be eligible for NHS-funded nursing care. This means the NHS will pay a contribution towards the cost of your nursing care.

If your care costs arenā€™t fully covered by the NHS and you have more than Ā£23,250 in property, savings and investments (if you live in England), you will have to pay the full cost of care yourself until such time as your assets reduce to Ā£23,250 or less. This could be during your lifetime and, if necessary, from your estate after you have died. This may not leave much for your family to inherit. Help from the local authority is available but it is strictly means tested, which results in very few people qualifying for financial help. (The value of your home is not considered in your means test if you or your spouse or a dependant is living there).

To avoid paying for their social care in the future, some people take steps to get rid of all their assets but this may mean they could end up in a less luxurious care home than they had hoped for or being treated as still owning the assets under the ā€˜deliberate deprivationā€™ rules.

Is using a trust an option?

You may have heard of people protecting the value of their assets and property from being used to fund care fees by putting them into a trust. If this is done well before there is a need for care, it can be the case that the home is not classed as part of their capital and they cannot be required to use it to fund their care fees. Great care needs to be taken, however, around the timing of this. The Local Authority can view such a step as ā€˜deliberate deprivation of assetsā€™ if they feel the intention is to avoid paying care fees and refuse funding as a result.

If you are considering using a trust, it is vital to get professional advice from a solicitor and make sure it is suitable for your individual circumstances. In some cases, there might not have been much benefit. Your income might have been enough to pay most or all of your care fees anyway. The level of your other capital may have been enough to meet the shortfall between your income and the fees for the length of your stay in care.

There were plans for the government to bring in a cap of Ā£72,000 for care home costs in 2020, but these have been scrapped. In the recent Spending Review, an additional Ā£1 billion for adult and childrenā€™s social care was announced by Sajid Javid, although it is yet to be seen what that will mean in practice.